Electronic Trade Documents Bill [ Lords ] (First sitting)

Alex Davies-Jones Excerpts

Committee stage
Monday 19th June 2023 Public Bill Committees

[Paul Scully]

This clause provides that a person may possess, and part with possession of, an electronic trade document. It removes the legal blocker that prevents trade documents in electronic form from being possessed, and therefore from having the same legal status as paper trade documents. The clause is fundamental to ensuring that there is equivalence between the two, which is needed if we are to meet our policy aims.

[Alex Davies-Jones (Pontypridd) (Lab)]

I rise briefly to endorse what the Minister says about the Bill. It is incredibly important, particularly post Brexit, when red tape has significant consequences for our ability to trade with the rest of the world. We welcome the Bill.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Clause 4

Change of form

Question proposed, That the clause stand part of the Bill.

[Paul Scully]

The clause provides the change of medium or form of a trade document—that is, it allows for the conversion of a paper trade document to an electronic one, or vice versa.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5

Exceptions

--- Later in debate ---

[Paul Scully]

Clause 5 contains an opt-out provision that allows industry participants to design their documents so that they are not caught by the Bill and are not possessable if they prefer to do business using other contractual arrangements or legal mechanisms. An express opt-out provision is not required and it will be enough if it can reasonably be inferred that it is not the intention that possession should apply. We have drafted the provision carefully to be limited to documents used in trade to which possession is relevant, allowing an opt-out where it is clear from the document or practices around its use that possession is irrelevant.

The Bill includes a delegated power in clause 5(2)(b) that will enable the Secretary of State to specify further types of documents or instruments that are outside the scope of its substantive provisions, in addition to uncertificated securities already cited in clause 5(2)(a). There is a further delegated power in clause 5(3) that enables the Secretary of State to amend or remove the exception in clause 5(2)(a). In acknowledgement of the Bill’s potential to spur further digitalisation of documents and related practises, the power may need to be exercised in circumstances where it is determined that a type of document or instrument that falls within the scope of the Bill requires more bespoke provisions to allow for its digitalisation, or where a type of document or instrument should not be capable of being used in electronic form.

On the amendments, the Government’s intention has always been that the Bill should apply UK-wide, and we have already agreed with our colleagues in Northern Ireland that the Bill does not require their consent, given that it deals with a reserved matter. The Welsh devolution settlement restricts Senedd Cymru from making changes to private property law, and we have agreed that legislative consent is not necessary in this case.

In the case of Scotland, private property law is a devolved matter and we have requested a legislative consent motion from the Scottish Parliament. We have worked with officials, and I know that Scottish Government Ministers have been advised to support that. I hope that we will continue to work to ensure that that happens. We want to consider the matter further and to have belt and braces, so we also consider it prudent to confer the power in clause 5(2)(b) on Scottish Ministers, both to exercise the power alone within areas of devolved competence and to act jointly with the Secretary of State. By including the option for Scottish Ministers to act alone and jointly, the delegated powers can be exercised in a flexible manner that best suits the prevailing need for secondary legislation. Moreover, it prevents any future uncertainty as to whether matters are within the devolved competence of Scottish Ministers, particularly if they cut across devolved and reserved matters.

The requirement in clause 5(4) for the Secretary of State to consult Scottish Ministers before exercising the power in clause 5(2)(b) will be disapplied in circumstances when the Secretary of State and Scottish Ministers act jointly to make regulations. As noted earlier, although the need for amendments to the Bill in the future is unlikely, we believe that such changes are best delivered through concurrent delegated powers that will allow both the Secretary of State and Scottish Ministers to make those changes. The proposed amendments will therefore enable Scottish Ministers to make such regulations when all the provision is within Scottish devolved competence and to act jointly with or be consulted by the Secretary of State in other cases.

The delegated powers previously afforded to the Secretary of State by the Bill are not substantively affected by the amendment, so we have tabled new clause 1 to provide for regulations under clause 5 to be subject to the affirmative resolution procedure at Westminster and in the Scottish Parliament. In addition to those two substantive amendments, we have had to include four consequential amendments to update and correct cross-references. I hope that colleagues will acknowledge the requirement for amendment 1 to change the appropriate authority, and the consequential amendments that allow that amendment to be inserted into the Bill.

[Alex Davies-Jones]

I have just a brief question for the Minister. In the Second Reading Committee, I pressed him on where the responsibility for the Bill would sit. I would appreciate it if he would put on the record exactly which Secretary of State will have responsibility for and oversight of the Bill.

[Patrick Grady]

I echo the point made by the Labour Front Bencher. This is a Law Commission Bill being taken forward by a Minister from the Department for Science, Innovation and Technology on matters largely overseen and regulated by the Department for Business and Trade. A little clarity about exactly which Secretary of State is referred to in these clauses would be helpful.

The Scottish Government welcome the Bill in principle, but the initial legislative consent memorandum set out a number of concerns about the powers granted to UK Ministers to legislate in devolved areas, particularly without the requirement for consent from Scottish Ministers or Scotland’s Parliament. The amendments tabled by the Minister go some way towards addressing that, so the supplementary legislative consent memorandum published by the Scottish Government on 13 June sets out:

“While the amendments proposed by the UK Government do not provide a full statutory consent provision, on balance, the Scottish Government recommends that the Parliament grants legislative consent”.

That is because

“The policy objective of the Bill is strongly supported by both the Scottish Government and stakeholders…there is no current legislative opportunity at Holyrood to make equivalent provision for Scotland, and any such legislation would not be as comprehensive as the UK Bill…the power involved is extremely limited, and unique to this law reform Bill…the aim is to ensure consistency in a mutually agreeable and workable way and that in practice it is highly unlikely for Scottish Ministers to want different arrangements for trade documents to apply in Scotland.”

It is welcome that the Minister has been able to table amendments that will allow Holyrood to agree to the Bill, but I wonder slightly whether this could not have been foreseen. Scottish Government Ministers and, indeed, those of us who represent the SNP in this House, have for several years expressed our concern at increasing overreach by UK Ministers into devolved areas, especially in the context of Brexit. There was quite a lengthy consultation before the Bill was published, so quite why none of this appears to have occurred to Ministers before we got to the Public Bill Committee right at the end of a Bill that started in the House of Lords is slightly beyond me. However, consensus does, for once, appear to have been reached. These amendments will make the Bill much more palatable, so that should ease its remaining stages both here and in Holyrood.

Electronic Trade Documents Bill [ Lords ]

Alex Davies-Jones Excerpts

Monday 12th June 2023 General Committees

[Alex Davies-Jones (Pontypridd) (Lab)]

I will keep my comments brief. As colleagues in the other place noted, this is a modest but incredibly important Bill. Its simple objective is to afford electronic trade and trade finance documents the same legal status as paper ones. This Bill, which has been drafted and crafted by the Law Commission, provides for the possessability of electronic documents that fall within its scope; they will have the same legal recognition and functionality as their paper counterparts. It also sets out provisions relating to the use of electronic trade documents, including provisions on indorsement and change of medium between electronic and paper documents.

The Bill’s terminology—“bill of lading”, “bill of exchange” and “mate’s receipt”—shows that we are talking about very out-of-date practices. Practices governing the exchange of goods date back centuries, and the language involved would not be alien to a merchant from the middle ages, so the Bill is very welcome indeed. Indeed, we all know the barriers to trade across borders; the Minister mentioned them. Research shows that a single trade finance transaction can involve 20 entities and between 10 and 20 paper documents. That all adds up.

In 2019 there were roughly 160,000 exporting businesses in the UK, exporting £367 billion-worth of goods and employing 10.2 million people. By the mid-2030s, that number could hopefully rise to 190,000 businesses. Paper trading involves not only volumes of paper, but time-consuming processes. A study in Singapore found that it took between four hours and seven days to process one paper trade document. Digitisation can reduce that to as little as 10 minutes.

In total, it is estimated that 25 billion paper documents are generated and couriered around the world annually just to facilitate container shipping. The Minister does not need me to remind him of the significant environmental costs, but they are colossal. That is why we support the Bill in its entirety. We see it as a long overdue reform that allows for the legal recognition of certain types of documents used in trade and trade finance in electronic form. It means that parties can finally use laws that apply to paper trade documents when transacting with electronic trade documents.

The Law Commission does important work in advising on the reform of long-outdated legislation, and I am grateful for its work on the Bill. Colleagues in the other place have raised concerns about how the law will be implemented, so I hope to hear from the Minister which Department will be responsible for overseeing and enabling the provisions, once they are on the statute book. The Bill is a valuable tool for ensuring that the world of trade and commerce operates smoothly and efficiently, and that UK businesses are not disadvantaged in any way.

Oral Answers to Questions

Alex Davies-Jones Excerpts

Thursday 27th April 2023 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Alex Davies-Jones (Pontypridd) (Lab)]

This week, yet another case of music copyright dominated headlines. Our proud creative industries are facing significant challenges, as we have heard. The role that AI will play in the future is also concerning for many. Exactly what action is the Minister taking to ensure that emerging tech and our world-leading creative industries are supported rather than sidelined?

[Lucy Frazer]

I am very conscious of this issue. We have fantastic creative industries that do original work, and we need to protect them. That is why I have held roundtables with the music industry to discuss that very issue. The idea is to put together a code of conduct, working closely with industry, to ensure that we protect the original work that they produce.

Oral Answers to Questions

Alex Davies-Jones Excerpts

Wednesday 15th March 2023 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Alex Davies-Jones (Pontypridd) (Lab)]

Since our departure from the UK—[Laughter.] Not yet! Since our departure from the EU, the UK needs to forge our own regulatory path to provide certainty to businesses investing in the UK, as well as providing confidence to consumers. However, UK law has failed to tackle the harms, including fake reviews and subscription traps, that we all now encounter online. The Government claim that they are taking action, yet we still have no legislation. Another delay, another broken promise—can the Secretary of State tell us when we can expect to see the digital markets, competition and consumer Bill finally laid before Parliament?

[Michelle Donelan]

We have committed to delivering it in this Session. Further details will be announced by the Leader of the House in due course.